The International Energy Agency (IEA) claims that Iranian oil exports could fall by as much as 50 percent in July, when European sanctions over that country's nuclear program take full effect.

The IEA said in a report issued on March 14 that Iranian crude output fell to 3.38 million barrels per day last month, the lowest level in at least three years, and that exports were below 2 million barrels, down from 2.6 million in November.

The head of the IEA's market and industry division, David Fyfe, said that when European sanctions come into effect, Iranian oil exports will fall by some 800,000 barrels a day.

"Iran will be casting around trying to find buyers for 800,000 to 1 million barrels," Fyfe said, adding that potential reductions in oil exports "could be much bigger than that."

The EU approved prohibitions on the purchase, transportation, financing, and insurance of Iranian oil in January, but contracts already signed before then are exempt until July 1. The IEA report noted that European insurance companies have announced they would suspend coverage for tankers calling at Iranian ports.

Iranian Oil Minister Rostam Qasemi countered that the IEA's figures and estimates were incorrect and that neither production levels nor exports have fallen. Speaking in Kuwait, where he was attending the International Energy Forum, Qasemi said Iran is "exporting what we are supposed to within OPEC."

Qasemi dismissed the loss of oil exports to Europe, saying that "the world is large enough and it is full of customers." Qasemi also claimed Iran's dependence on oil revenues "has decreased significantly" in recent years.

South Korea and India have increased purchases of Iranian oil. China's purchases from Iran dropped in January but that was due to a pricing dispute that has since been resolved.

Western states are hoping sanctions against Iran, particularly Iran's oil exports, will convince Tehran to negotiate on its nuclear development program, which some governments see as a step toward developing a nuclear weapon capability.

The U.S. Department of Energy said in 2010 Iranian oil exports totaled some $73 billion and accounted for about half of the government's revenues.